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Monthly Archives: November 2009
Terror in Mumbai
I just watched a haunting and disturbing documentary on the terrorist attacks in Mumbai from HBO that is a must watch for everyone. Terror in Mumbai is stunning because it not only shows you what happened and how it happened, but they play recorded cell phone conversations between the terrorists and their handlers in Pakistan.
My conclusions from watching this documentary is:
1)We must fight fanatical Islam with every ounce of strength and never give in. We must give them no quarter. That we cannot give up no matter how hard the fight. And that we cannot negotiate with fanatical Islam. Just listen to the cell phone conversations and you will begin to understand there is no negotiations here.
2)Any tourist in a foreign country is not safe and that you should avoid tourist attractions and hotels.
3)I pray that US police forces make this documentary a must watch, but I am fearful that we are just as clueless in dealing with these kinds of terrorists as the Indian forces, who were hapless.
4)We must actively boost intelligence, because the terrorists responsible here have promised that the Terror in Mumbai is “just the beginning of the film.”
Here is short trailer for the film:
Moishe House
I’m on the board of directors of a wonderful organization called Moishe House. This is the only organization I am on the board of and I feel very strongly about it. There is a real crisis in the Jewish world, in which young people are turning away from synagogues and organized religion and the way their parents have practiced religion because it provides no meaning for them. And many of them no longer have a connection to the Jewish world.
Moishe House Foundation subsidizes some or most of the rent for young Jews in their 20s so that they can open up their homes to provide Jewish programming and events to their larger community. The residents decide their own programming, such as Shabbat dinners or Jewish movie night and how many events they want to hold. By allowing young Jews to create their own experience and to operate not out of a synagogue but their own homes is creating an amazing dynamic. There are Moishe Houses all of the world from San Francisco to Buenos Aires to London.
The Jerusalem Post just featured Moishe House Londonon the front page of the paper. Here is a snippet:
BY PRIDING themselves on their pluralistic approach to both Jews and the Jewish faith, Moishe House London has earned itself a reputation of being “Chabad House without Chabad.” “We have a space where all different types of people can mix together. We don’t bring the baggage that other organizations bring. I think there’s an atmosphere of respect for where people are coming from,” says Brett Leboff, 30, who runs a music management and production company. “We’ve all had different experiences in terms of Judaism and this is a melting pot where it all comes together, which makes it very interesting from a creative point of view.”
Despite not being financially self-sufficient, the community benefits from creative independence. “They [funders] realized that they will get better results by allowing it to run independently, but the organized Jewish community hasn’t always made that connection,” Finlay explains. “Autonomy is the key, it’s not dictated by rabbis or funders. It’s happening in America where funders are more innovative, but the UK is a bit behind.”
Here is the link to the article: Jerusalem Post Article on Moishe House
And finally here is another link from an episode from PBS in which Moishe House was featured.
I’m Not Going to Hire Anyone in the U.S.
A must read from Jeff Matthews on a major CEO warning that because of rising taxes and the pending health care legislation, he is not hiring anyone in the US.
Obama Responds to Cuban Blogger
While I just knocked the President for his shirking the moral high ground in China, I do commend him for responding to Cuban blogger, Yoani Sánchez. Ms. Sanchez has been highlighting how tough and bad life is in Cuba and she recently got beat up by Cuban security people for it. Good for the President, I would like to see more actions like this.
Human Rights, A Contrast
President Barack Obama recently went to China. The New York Times wrote an article on how he skirted Chinese sensibilities especially on human rights issues. Here is a snippet:
Whether by White House design or Chinese insistence, President Obama has steered clear of public meetings with Chinese liberals, free press advocates and even average Chinese during his first visit to China, showing a deference to the Chinese leadership’s aversions to such interactions that is unusual for a visiting American president.
And the link: Skirting Human Rights Article
Now this was very interesting because his opponent in last year’s election for President, Senator John McCain recently wrote a wonderful oped piece for the Financial Times that I was going to post, but forgot to. McCain wrote about human rights on the anniversary of the fall of the Berlin Wall. The contrast between the two approaches on human rights could not be greater.
Most important is this: governments that embody human rights must champion them in their foreign policies – in all places, for all peoples and at all times. This is not just the right thing to do; it marks a higher form of realism. The character of regimes cannot be divorced from their behaviour. Governments that abuse and lie to their own people will likely do the same to us, or worse. Conversely, states that respect the rights of their citizens are more apt to play a peaceful role in the world. For reasons of basic self-interest, then, we must lead the long, patient effort to shape a world in which human rights are more secure for more people.
I highly recommend that everyone read the rest of his oped and the importance promoting human rights: John McCain on Human Rights
Faber interview
Here is a pretty good Marc Faber radio interview. He agrees with me that cash is trash and so are bonds.
Who Determines Who is Jewish?
There is a case before the Supreme Court of Britain. The question is who is a Jew? There is a real identity problem in today’s Jewry. Is being Jewish a race or a faith or both? This is an issue as the Orthodox have put themselves in charge of who is Jewish and who isn’t. And according to the Orthodox, if your mother isn’t Jewish, you aren’t Jewish. This gives the Orthdox tremendous power in the Jewish world. If you convert to Judaism you can only be Jewish if converted by the Orthodox. There have been real problems in Israel about this as I have written before:
Here is an excerpt from a very good New York Times article about the case:
The case began when a 12-year-old boy, an observant Jew whose father is Jewish and whose mother is a Jewish convert, applied to the school, JFS. Founded in 1732 as the Jews’ Free School, it is a centerpiece of North London’s Jewish community. It has around 1,900 students, but it gets far more applicants than it accepts.
Britain has nearly 7,000 publicly financed religious schools, representing Judaism as well as the Church of England, Catholicism and Islam, among others. Under a 2006 law, the schools can in busy years give preference to applicants within their own faiths, using criteria laid down by a designated religious authority.
By many standards, the JFS applicant, identified in court papers as “M,” is Jewish. But not in the eyes of the school, which defines Judaism under the Orthodox definition set out by Jonathan Sacks, chief rabbi of the United Hebrew Congregations of the Commonwealth. Because M’s mother converted in a progressive, not an Orthodox, synagogue, the school said, she was not a Jew — nor was her son. It turned down his application.
That would have been the end of it. But M’s family sued, saying that the school had discriminated against him. They lost, but the ruling was overturned by the Court of Appeal this summer.
And check out the court’s logic for overturning the ruling:
In an explosive decision, the court concluded that basing school admissions on a classic test of Judaism — whether one’s mother is Jewish — was by definition discriminatory. Whether the rationale was “benign or malignant, theological or supremacist,” the court wrote, “makes it no less and no more unlawful.”
The case rested on whether the school’s test of Jewishness was based on religion, which would be legal, or on race or ethnicity, which would not. The court ruled that it was an ethnic test because it concerned the status of M’s mother rather than whether M considered himself Jewish and practiced Judaism.
“The requirement that if a pupil is to qualify for admission his mother must be Jewish, whether by descent or conversion, is a test of ethnicity which contravenes the Race Relations Act,” the court said. It added that while it was fair that Jewish schools should give preference to Jewish children, the admissions criteria must depend not on family ties, but “on faith, however defined.”
I think this case has strong ramifications and will bring to the forefront the problems with basing a religion on ethnicity. Whether your mother was bor Jewish or not is an arbitrary decision made up by Rabbis in the middle ages, when women were getting raped and they had no idea who the father was. Just a casual read of the bible shows the importance of patriarchal line. And the most famous convert is Ruth from the book of Ruth, who ends up being the great, great grandmother of King David. And she didn’t go through an Orthodox conversion.
I’m happy to see the case come to the limelight and I think the discussion it will engender will have lasting implications in the Jewish world.
Here is a link to the full New York Times story: Who is a Jew (NY Times)
Ford Unveils New Hit Car
OMG this is so funny:
Ford Unveils New Car For Cash-Strapped Buyers: The 1993 Taurus
Why Are You Sitting in Cash?
The Treasury Department and the Federal Reserve with help from Congress and the White House is making something very, very clear. They are going to devalue the American dollar through the printing of money, maintaining excessively low interest rates and out of control government spending.
If you are sitting on excess cash and that cash is in US Dollars, I feel like you have been warned. Those dollars will be worth substantially less in the future than they are now.
The Federal Reserve has communicated loud and clear they are going to keep interest rates low for an “extended time.” By keeping interest rates artificially low they are trying to recapitalize the financial system, but in the process are punishing savers who are earning little or no interest returns on their money. By keeping interest rates so low, they are actively trying to re-inflate the economy and prices, as they are worried about deflation. They are also keeping interest rates lower than other countries, thereby causing other countries currencies to increase in value.
More importantly, the Federal Reserve is doing something called “Quantitative Easing.” This made up term, means money printing. The Federal Reserve is quite simply buying the new debt that the Treasury Department is issuing. In fact, in the second quarter of this year, the Federal Reserve bought as much as half of all new Treasury Bonds issued. Think about that for a second. The government is buying half of the debt that the government issues. Does that sound absurd?
Treasury bond issuance is up 200% this year as the government posts close to a $1.5 trillion annual deficit. So, here is a dumb question. If the Federal Reserve is buying half of all new Treasury bonds, what happens when they stop? They claim they are going to stop in the first quarter of next year.
I don’t think the Federal Reserve can stop buying. The moment they stop buying interest rates will soar and bond prices will plunge, which will make our debt problem even worse. Money printing will go on for a while, and it will destroy the dollar. In a cynical way it also makes all of us feel better in the short run. We export more in the short run with a cheaper currency, our debts our lower and stocks, real estate and other real things start going up in price. And what better way to pay for all of the government debt, than to devalue that debt?
But in the long run, this is disastrous and it always ends badly. Even worse is to look at the White House and Congress. Beyond the Fed’s money printing, we have out of control spending by Congress. The projected US deficit for 2009 through 2019 is $9 Trillion. Who in the world is going to finance that debt? Where is that money going to come from?
A recent study by Peter Bernholz showed that the 12 largest hyperinflationary episodes in history all reached a tipping point when government expenditures were more than 40% of GDP. Well, the US government is over 40% this year and is projected at 40% next year.
The evidence of massive money printing is already popping up. Look at the price of precious metals, such as gold, which is soaring. Throughout history gold has been a monetary substitute and it becomes very valuable when governments become reckless with money printing and spending.
Better yet, look at the stock market or other commodities. I think we see the clearest evidence of the money the Fed is printing flowing into the markets. The stock market is quite expensive; the economy has been terrible, yet it continues to rise. I think that is why it is quite dangerous to short right now. The market may keep going up simply because there are more dollars floating around out there.
So what is my firm, Sabre Value, doing about the devaluation of the dollar?
We are not standing still while our government destroys the value of our dollars. First, we are fully invested. Stocks should do well, especially on a nominal basis as the dollar falls. Second, we have substantial positions in stocks based in Canada and Australia and benefit as those currencies rise. Third, we own a smattering of energy and resource companies that should do well as those commodities rise in dollar prices. Finally, we think that in an environment of soaring liquidity that our microcap stocks should do exceptionally well, as the liquidity flows down to them. That liquidity should have an outsized effect on smaller equities.
I highly recommend all investors search out alternatives from real estate to stocks, to solid currencies to even precious metals and protect your savings from the falling dollar.